ICB FINANCIAL GROUP HOLDINGS AG
(Incorporated in Switzerland)
FINANCIAL RESULTS
31 DECEMBER 2009
CONTENTS PAGE
Announcement of Results 2 - 3
Chairman Statement 4 - 6
Consolidated Statement of Comprehensive Income 7 - 8
Consolidated Statement of Financial Position 9
Consolidated Statement of Cash Flows 10 - 11
Consolidated Statement of Changes in Equity 12 - 13
20 April, 2010
ICB Financial Group Holdings AG (ICBFGH)
Announcement of Results- Financial Year Ended 31 December 2009
PERFORMANCE IN FINANCIAL YEAR 2009
ICBFGH recorded a consolidated loss for the financial year ended 31 December,
2009 of USD 9.5 million compared to a profit of USD 13 million in the previous
financial year. Loss attributable to shareholders for 2009 was USD 4.1 million
against a profit of USD 13.0 million in 2008.
The results for the year were adversely affected by the poor performance of ICB
Islamic Bank Limited (Bangladesh) ( ICBIB) which recorded a loss of USD 11.7
million mainly due to higher impairment charges for non performing loans.
Excluding ICBIB losses, the Group recorded a profit of USD 2.3 million.
Summary of Key Results
Year Ended Year Ended Inc/(Dec)
31 December 2009 31 December 2008
USD Mil USD Mil USD Mil
Consolidated Net Interest Income 49.4 48.8 0.6
Consolidated (Loss)/Profit ( 9.5 ) 13.0 (22.5)
Consolidated (Loss)/Profit After ( 4.1) 21.2 (25.3)
Tax Attributable To Shareholders
Equity Attributable to 200.3 189.0 11.3
Shareholders
(Loss)/Earnings per share (USD) (0.02) 0.12 (0.14)
Return on Equity ( %) -2.05% 11.25% -13.3%
Total Loans & Advances 713.8 588.1 125.7
Total Deposits 951.7 777.7 174.0
Highlights of the Group's Performance
- Total Group assets grew by 18% to USD1,324 million, total loan and
advances grew by 21% to USD713.8 million and customer deposits grew by 22 % to
stand at USD 951.7 million. These growths were mainly contributed to by improved
performance at PT Bank ICB Bumiputra Indonesia.
- Net interest income improved marginally by USD 0.6 million to USD 49.4
million. This was mainly due to lower net interest margins on earnings assets.
- Operating expenses of USD 58.4 million was lower by USD 5.2 million. The
drop in expenses was mainly due to one-time non recurring charge of USD 7.5
million at ICBIB for contingencies and litigation in the previous financial
year.
- With the loss position in 2009, return on equity was negative 2.05% .
Outlook for the Current Year
With improving global marco-economic conditions, the Group expects the
operating environment to be more favourable especially in the emerging markets
that it operates. In addition, in line with the Group's medium term strategic
plan, it has completed an internal transformations process to improve on its
operating efficiency. This included the further strengthening of its
management team, improvements in systems, and business process and delivery
channels amongst others.
With regards to the Group's investment in ICBIB, most of the legacy issues
that the Group inherited with the acquisition of the Bank is being addressed.
The focus in the current year will be to grow its asset base and intensify the
recovery of legacy non performing loans. Further, a detailed review to address
the existing weaknesses in ICBIB's capital structure has also commenced. All
these efforts are expected to yield positive results in the near term.
The results for the first 3 months of 2010 are encouraging and
indicate that the transformation initiatives are gaining traction. Barring the
unforeseen, the Group is optimistic that the results for the current financial
year will be much better and more profitable.
For more information, please contact:
Tai Terk Lin
Group CEO
Tel: +603-62016051
Fax: +603-62016053
Email: tl.tai@icbglobal.com.my
ICBFGH's AIM nominated adviser is RFC Corporate Finance Ltd.
Contact Stephen Allen Tel: +61 8 9480 2500.
Chairman's Statement
As 2009 drew to a close the world economy started to show signs of
positive growth and a movement out of recession. Nonetheless, the year as a
whole presented very difficult trading conditions and particularly so for the
Financial Services industry, this being reflected in consumer demand being
restrained and increasing loan loss provisions. The Group has not escaped the
impact of this adversity although in the latter months of the year it has been
encouraging to see underlying growth returning in a number of countries where
the Group has a presence.
It is against this background that I have to report to shareholders
Group year-end results reflecting a pretax loss of USD$7.6m (profit USD$15.8m
2008). After taking account of the exceptional items included within the 2008
accounts, the 2009 result at the trading level reflects a modest deterioration
in comparison with the previous year. This is a disappointing result although
it is one which not only reflects the difficult trading conditions referred to
above but also takes accounts of significant costs associated with a major
reorganization and restructure of the former Oriental Bank of Bangladesh (now
ICB Islamic Bank). There has been little growth in Group income; net interest
income at US$49.3m increased but only 1.2 % above the 2008 result of US$48.8m.
Commission income was flat at US$11.1m (US$11.1m -2008). Operating expenses
have reduced by 8.3% to US$58.4 (US$63.7- 2008) reflecting a lower charge this
year due to one-time charges in 2008 for litigation and contingencies.
However, the Group's cost/income ratio remains high at 85% (84% -2008). Our
plan for the medium term is to seek to reduce this measure to below 60%.
Impairment charges increased to US$16.6m, an increase of 15% on the
2008 result (US$14.4m). Of this sum Bangladesh accounts for 65%, Indonesia 20%
and Ghana 11%. In Bangladesh a special unit has been established under central
supervision to improve the recoveries associated with the former Oriental
Bank. I am pleased to say that progress here is very encouraging and I expect
this to be reflected in our performance results in 2010.
I referred above to the positive economic signs emerging in the
latter part of 2009. In the first half of the year customer loan and deposit
volumes reflected only marginal growth. In the second half, and particularly
as we approached the end of the year, volumes increased with year-end figures
reflecting loan growth of 21% and deposits up by 22%. Loan growth was
particularly strong in Indonesia and Laos: Indonesia, Albania, Gambia and
Malawi were major contributors to the increase in deposits. Not only does this
growth signal the emergence of the world economy from recession, but also
reflects a strategic shift introduced across the Group in the second half of
the year to broaden the customer proposition in those countries where there is
opportunity and capacity to do so.
On a regional basis, activities in Africa and Europe were
profitable in the year. However, an increase in loan loss provisions in Ghana
and very difficult trading conditions within Guinea arising from the political
turmoil there resulted in the contribution from Africa as a whole falling to
US$2.2m (US$6.3m -2008). Albania on the other hand performed well delivering a
strong contribution of some US$1.4m (loss US$2.1m 2008).
The Group's presence in Asia, whilst still loss making, improved in
2009. Bank Bumiputera, Indonesia increased its contribution to US$2.6m (US$0.6m
-2008). Operating losses in Laos and Bangladesh reduced, the latter falling
from US$16.8m in 2008 to US$11.7m. Notwithstanding the improvement seen in ICB
Islamic Bank of Bangladesh, this investment has to date had a major impact
on Group performance as a whole. However, the Board remains confident in the
prospects for this investment. The operation in the country is under close
supervision and guidance from the Group's Global Management capability, a
measure which has delivered improvements to date with considerably more to
follow.
During the year the Group continued to expand its delivery channel
capability with additional branches and the expansion of the existing ATM
network. A total of 5 new branches were opened in the year, 2 in Africa and 3
in Asia. This increases the total branch network across all countries to 146.
Further, 14 micro banking outlets were opened in Indonesia during the year.
Across the Group 21 new ATM's were installed. Internet banking is being
introduced at Bank Bumiputera, Indonesia and an expansion of this capability
to other countries is planned to commence in 2010.
I am delighted to inform shareholders that the Group continues to
receive industry recognition with a total of 6 prestigious banking awards
being received in 2009:
ICB Albania: Global Finance, Best Bank Award 2009.
The Banker, Financial Inclusion Award 2009.
EMEA Finance, Best Bank in Albania 2009.
ICB Ghana: EMEA Finance, Best Bank in Ghana 2009.
ICB Guinea: The Banker, Bank of the Year 2009 (6th consecutive
year).
Global Finance, Best Bank Award 2009.
I extend congratulations to the Management and staff of the above
Banks on achieving such significant industry recognition.
In October the Board appointed Mr. Tai Terk Lin as Group CEO. Mr.
Tai joins ICB Group from Platinum Capital Management, a London based hedge
fund company where he was Executive Director and Head of Business Development
(Asia). He is an accomplished banker with financial services experience
encompassing commercial banking, private banking and asset management. I am
sure that this experience and the strong commitment he brings to the Group
will provide the leadership required as we build for the future. I extend to
him a very warm welcome.
During the second half of the year the Group completed a business
re-structure which places greater emphasis in meeting the specific needs of
defined customer groups, particularly consumer and business banking. To ensure
the effectiveness of these changes the Global Management support capability
has been strengthened. This will ensure that each country will have access to
guidance and support in the implementation of the changes required to secure
the benefits of the new business opportunities which become available. It will
also present the opportunity to identify and develop synergies which exist
within the Group and to adopt these for the wider benefit of all.
Notwithstanding the fact that recovery in many of the world's
economies may be slow and patchy the Board is optimistic that the Group will
regain profitability in 2010. However, much will depend on returning ICB
Islamic Bank, Bangladesh to profitable trading. The past year has reflected a
positive start in this direction but there still remains much to be done, and
at a faster rate. I can assure our shareholders that in the year ahead this
objective in particular will continue to have the close attention of the
Board.
The Group currently employs some 2,850 staff. Their continued
dedication and commitment to meeting and servicing customer needs has
supported the Group through a difficult trading period and on behalf of the
Board I thank them warmly.
In conclusion, I must convey appreciation to our shareholders for
their continued and most valuable support. We are very conscious of their
expectations and do not intend to disappoint.
Michael R Hanlon
Group Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2009
2009 2008
USD'000 USD'000
Interest income 106,010 101,707
Interest expense (56,620) (52,892)
Net interest income 49,390 48,815
Fee and commission income 11,300 11,360
Fee and commission expense (152) (163)
Net fee and commission income 11,148 11,197
Foreign currency gain 3,258 3,593
Gains less losses from financial investments 3,116 1,247
Gain less losses from trading securities 72 -
Gain on disposal of associate - 77,584
Other operating income 1,831 1,616
Impairment charges for loans and advances to (16,605) (14,422)
customers
Fair value change in foreclosed properties (1,297) -
Impairment of goodwill - (50,000)
Operating expenses (58,456) (63,752)
Operating (loss) / profit (7,543) 15,878
Share of results of associates (59) (33)
(Loss) / Profit before taxation (7,602) 15,845
Tax expense (1,856) (2,840)
(LOSS) / PROFIT FOR THE YEAR (9,458) 13,005
Other comprehensive income:
Exchange differences on translating foreign 15,808 (12,205)
operations
Available-for-sale financial assets 3,174 (2,614)
Other comprehensive income for the year 18,982 (14,819)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 9,524 (1,814)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - CONT'D
FOR THE YEAR ENDED 31 DECEMBER 2009
(Loss) / Profit of the year attributable to:
- Owners of the parent (4,119) 21,282
- Non-controlling interests (5,339) (8,277)
(9,458) 13,005
Total comprehensive income attributable to:
- Owners of the parent 11,263 9,795
- Non-controlling interests (1,739) (11,609)
9,524 (1,814)
Earnings per share
- Basic and diluted (Expressed in USD per share) (0.02) 0.12
The accompanying notes form an integral part of the financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2009
2009 2008
USD'000 USD'000
ASSETS
Cash and bank balances 267,247 276,738
Loans and advances to customers 713,824 588,058
Financial investments 190,966 122,539
Foreclosed properties 15,490 17,728
Investment in associates 1,791 1,846
Goodwill and other intangible assets 62,308 55,036
Prepaid lease payments 79 107
Property and equipment 24,584 17,083
Other assets 44,016 36,443
Deferred tax assets 3,377 4,537
Total assets 1,323,682 1,120,115
LIABILITIES
Deposits from other banks 172,338 147,159
Deposit from customers 951,796 777,652
Other liabilities 39,592 42,753
Tax liabilities 998 3,046
Deferred tax liabilities 232 303
Total liabilities 1,164,956 970,913
EQUITY
Paid up share capital 145,960 145,960
Share premium 782 782
Retained earnings 37,808 45,012
Other reserves 15,812 (2,655)
Equity attributable to owners
of the Company 200,362 189,099
Non-controlling interests (41,636) (39,897)
158,726 149,202
Total equity and liabilities 1,323,682 1,120,115
The accompanying notes form an integral part of the financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
2009 2008
USD'000 USD'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation (7,602) 15,845
Adjustment for :
Impairment charges for loans and advances to customers 16,605 14,422
Amortisation of prepaid lease rental 36 37
Amortisation of intangible assets 1,481 397
Depreciation of property and equipment 3,342 3,096
Loss on disposal of property and equipment (24) 20
Gain on disposal of associate - (77,584)
Fair value changes in foreclosed properties 1,297 -
Impairment of goodwill - 50,000
Recovery of loan - (601)
Share of results of associates 59 33
Gain on foreign exchange translation (3,258) (3,593)
Cash flow from operations before working capital changes 11,936 2,072
Increase in operating assets (89,390) (21,778)
(Decrease)/increase in operating liabilities 126,444 (34,009)
Cash generated/(used in) from operations 48,990 (53,715)
Tax paid (2,663) (1,994)
Net cash from/(used in) operating activities 46,327 (55,709)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of a subsidiary, net of cash acquired - (38,474)
Proceeds from sale of associate - 142,006
Purchase of property and equipment (7,451) (5,376)
Purchase of intangible assets (8,469) (489)
Proceeds from sale of property and equipment 22 24
Dividend received - 2,086
Proceeds from sale of foreclosed property 2,888 -
Decrease in financial investments 5,081 38,159
Increase in financial investments (73,420) (30,998)
Net cash (used in)/from investing activities (81,349) 106,938
CONSOLIDATED STATEMENT OF CASH FLOWS - CONT'D
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
2009 2008
USD'000 USD'000
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend paid to non-controlling interests - (156)
Net cash used in financing activities - (156)
Net (decrease) / increase in cash and cash equivalents (35,022) 51,073
Cash and cash equivalents at the beginning of the year 228,644 194,224
Effect of exchange rate changes on cash and cash 20,640 (16,653)
equivalents
Cash and cash equivalents at the end of the year 214,262 228,644
The accompanying notes form an integral part of the financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
TOTAL EQUITY
ATTRIBUTABLE TO
SHARE SHARE OTHER RETAINED OWNERS OF THE NON-CONTROLLING TOTAL
CAPITAL PREMIUM RESERVES EARNINGS PARENT INTERESTS EQUITY
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
At 1 January 2009 145,960 782 (2,655) 45,012 189,099 (39,897) 149,202
Loss for the year - - - (4,119) (4,119) (5,339) (9,458)
Other comprehensive
income:
Currency translation
differences arising from
translation to
presentation
currency - - 13,253 - 13,253 2,555 15,808
Gain in fair value on
available-for-sale
securities - - 2,129 - 2,129 1,045 3,174
Capitalization of
retained
earnings of subsidiary - - 3,085 (3,085) - - -
Total comprehensive
income
for the year - - 18,467 (7,204) 11,263 (1,739) 9,524
At 31 December 2009 145,960 782 (15,812) 37,808 200,362 (41,636) 158,726
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - CONT'D
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
TOTAL EQUITY
ATTRIBUTABLE TO
SHARE SHARE OTHER RETAINED OWNERS OF THE NON-CONTROLLING TOTAL
CAPITAL PREMIUM RESERVES EARNINGS PARENT INTERESTS EQUITY
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
At 1 January 2008 145,960 782 (2,341) 34,903 179,304 19,478 198,782
Profit for the year - - - 21,282 21,282 (8,277) 13,005
Other comprehensive income:
Currency translation differences
arising from translation to
presentation currency - - (9,734) - (9,734) (2,471) (12,205)
Loss in fair value on
available-for-sale securities - - (1,753) - (1,753) (861) (2,614)
Transfer of reserve to retained
earnings arising from disposal
of associate - - 11,173 (11,173) - - -
Total comprehensive income
for the year - - (314) 10,109 9,795 (11,609) (1,814)
Non-controlling interest from
business combination - - - - - (47,610) (47,610)
Dividend paid to non-controlling
interests - - - - - (156) (156)
At 31 December 2008 145,960 782 (2,655) 45,012 189,099 (39,897) 149,202
The accompanying notes form an integral part of the financial statements.